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Bankrupt owner collects rent but does not pay the HOA

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hoa feesOne of the owners in our building stopped making payments of HOA fees 18 months ago; about 12 months ago, he rented their unit; and about six months ago he declared bankruptcy. Despite his bankruptcy, the renters pay him, but no fees are paid to us: the HOA pays for their water, security access, elevator access, and garage. Our lawyer says we have no rights until bankruptcy is settled. Is that truly the case?

Comments

In my state of Michigan, you, the association, can demand that the renters pay the assosciation fee directly to the association by-passing the owner. This is not inconflict with the rental agreement between the owner & renter. I have found that many so called professionals, whether lawyers or management comp. are uninformed. You must check out your own state condo laws.
Posted @ Monday, July 19, 2010 7:57 AM by Donna Alfieri
I do not know the laws of each state with that said the only recourse is if the HOA put a lean on his property.  
 
The bank does allow owners to stay in the condo and take care of the property. I have heard of bankrupt owners renting out their condos while in Bankruptcy. You can call the bank and tell them he is renting the condo. This could get him in trouble depending on the the state laws.  
 
The HOA is still not going to get the money until bankruptcy is over. 
 
Victor
Posted @ Monday, July 19, 2010 8:02 AM by Victor
You had options for 18 months and nothing was done! The lawyer is correct if the HOA was named a creditor on the BK you have no rights to back dues! He will have to resume paying them again when his BK is over and let it be a lesson for the future don't let homeowners get that far behind before you take action.
Posted @ Monday, July 19, 2010 8:38 AM by amanda
In Florida the SB1196 that came into law will help you to resolve this issue 
 
Posted @ Monday, July 19, 2010 9:37 AM by Jose E. Humaran
Amanda and others -- A couple of points of clarifications. The Board did act immediately upon delinquency: we did get a lien against the property, but there is a waiting period and the owner filed bankruptcy a few days before that period was up. We live in California and have followed the letter of the law. We have not, however, contacted the bank, so thank you for that idea.
Posted @ Monday, July 19, 2010 11:42 AM by TS
our HOA does not do liens they do forcible entry and detainers.. homeowner does not pay they lose the rt to occupy and the judge grants possession to HOA. We are in IL I am sure CA has different laws I would ask an attorney about the FED because it entitles you to 6 months back dues no matter what in IL.. May be helpful for the future?
Posted @ Monday, July 19, 2010 1:03 PM by amanda
What are the rules for Nevada on this point?
Posted @ Monday, July 19, 2010 10:22 PM by Cary
Regardless of the state laws, you need to consult with a bankruptcy attorney regarding the extent to which you can exercise ANY of your state law rights in light of the automatic stay. Depending on what goes on in the case, the debtor's contractual agreements with third parties (i.e., the renter, the condo association) may no longer be legally enforceable. You should consult a competent bankruptcy attorney in your state that handles real estate matters.
Posted @ Thursday, July 22, 2010 4:12 PM by Bankruptcy Attorney
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